Free Markets, Free People


Warren Buffet — Please! Tax me more!

The article today in the New York Times where Warren Buffet laments that he just gets off so easily at tax times is one of those hinkey pieces that establishes two premises that are, in fact, nonsense.

Premise one is the rich are not paying their fair share.  IRS statistics consistently tell us that it is the bottom 50% who aren’t paying any share and the so-called rich pay the lion’s share.   Buffet at least tries to push it toward “super-rich”, whatever that means.  However, it is just another version of the class warfare argument the left has been trying for years.  Bill Clinton has stood up and said “why aren’t they taxing people like me more?”  Barack Obama has done the same.  

Here’s what Buffet is pitching:

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Buffet first goes right to the class aspect of it in the most emotional manner possible.  The implication, of course, is that the rich aren’t fighting … they don’t have too.  Obviously then the “poor and middle class” must.   They couldn’t do it for reasons other than they must, I guess.

And, of course, the other other narrative is that 15% is a “bargain” tax rate.   He attempts to make the point that the super-rich don’t do much work to earn their money.  Well here’s a clue for Mr. Buffet – the government doesn’t work at all for the 15% it takes.

Premise two is that if they’d just tax the rich more, all of our revenue problems would be over.   The fact is that’s not even close and a money man like Buffet knows that.  What it would do, though, is help dry up any revenue that is now being gotten from investments as the rich seek other ways to invest and protect their income.  Again, this should be Econ 101 stuff for a guy like Buffet. 

The government could tax the rich 100% next year and still have to borrow money.   But we know, given human nature, that there’d be no 2nd year at 100% because those with that sort of money would have found ways to protect it by then.   Meanwhile, the economy would be in reverse.

Finally, Buffet says:

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Would someone who has Warren Buffet’s email please apprise him of the fact that a) he doesn’t speak for all the “rich” so he ought to confine his appeal to only himself and b) if he’s really serious about this, he doesn’t have to wait to have the government increase his taxes, he can voluntarily contribute any amount he wishes to the US Treasury to help pay down the debt or help their “fellow citizens” who are “truly suffering”.

Of course he do everyone a much greater favor if he’d take that money and instead invest in a business that’s got promise so they can expand and hire people.   Dollar for dollar that would do everyone more good than appealing to government to raise tax rates on those who actually do have the option of what I described.

But, of course, that doesn’t fit the liberal narrative and the one thing those like Buffet and George Soros have reliably done for some time is push that narrative.

~McQ

Twitter: @McQandO

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17 Responses to Warren Buffet — Please! Tax me more!

  • Why do the rich who would be willing to be taxed have to be told to pay more?  Why don’t they just pay more?  I’m sure the government would not object to donations by the rich.

  • He believe he doesnt pay enough in taxes yet spends thousands (if not millions) tax experts to prepare his taxes so he pays as  llittle as possible.

    Anyone who says they arent taxed enough should be made to pay a 95% tax on their gross income with no deductions allowed.

  • Warren Buffet: we rich folk are good people with generous, giving hearts, and if our government would force us to, we’d show it!

  • Warren is just talking his book.  One of the most important, key tools the rich use to avoid both income and estate taxes are insurance products.  What individual in the world has the most personal wealth tied up in the insurance industry?  Why, shockingly, it just so happens to be Warren Buffet!  His stake in Berkshire includes GEICO as well as various other insurance and re-insurance investments.

    His whole ‘tax the rich’ spiel is all about driving all those high value customers right into his arms.  Cynically using class warfare to drive up his profits.

    • I wondered about that.

      The “mega-rich” often get that way through a combination of a few factors:

      1.  Luck (such as marrying the widow of a rich colleague, having a father who grew rich running hooch, or being in a position to do other very rich people “favors”, in return for which they will “share the wealth”);

      2.  Hard work, brains, inspiration, and thrifty, sensible habits (Buffet ought to know about this);

      3.  A cynical willingness to use the government to create a favorable environment for one’s self, which usually means driving out competition.

      Buffet has plenty of money.  Raising income taxes will not greatly affect that.  It will, however, stop other people getting enough money to potentially threaten his little empire.

      These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.


      Boy, ain’t it, though!  O’ course, I’m SURE that neither Buffet nor any of the other signatories of the “Giving Pledge” ever even so much as SUGGESTED to their members of Congress that they needed or even wanted “protection”, or that such-and-such law would be a great idea, or this-or-that regulation is a real hindrance to business job creation.  No sir!  Why, all those campaign contributions and lobbyist fees were paid SOLELY to promote the good of the country!  How could anybody think otherwise?

      Bah.  This class-warfare claptrap makes me ill.  As so many others have said, Buffet and his fellow rich libs should be their money where their mouths are: either write a REALLY big check to Uncle Sugar, or else take the money and implement their own “stimulus plan”.  Hey, Warren!  You’ve got a few million bucks laying around.  Why not open a factory in Detroit or LA or Chicago or Philly or some other place where jobs are scarce.  What’s that?  Oh, not a “good investment”, you say?  And I thought you were all about “giving back”.

      Hypocritical f*ck.

  • Warren needs to wait no longer … he can mail his check to:

    Attn Dept G
    Bureau of the Public Debt
    P. O. Box 2188
    Parkersburg, WV 26106-2188

    So you don’t forget, mail by midnight tonight.

  • <i> Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate</i>
    Since when is paying hundreds of millions of dollars in taxes a “blessing”?


     

  • Buffet could pay more in taxes if he paid himself a salary instead of using the tax dodge of capital gains for his income. instead of wages.  But then again it’s better to rail against the darkness than to light a candle, metaphorically speaking.

  • Most wouldn’t mind being told to pay more in taxes as well

    >>> What I’d tell them to do, I doubt they’d welcome hearing

  • If we had to carry all the money we make in cash and in our wallet, people will realize making billions is a burden.

  • Self-help, Warren.
    Pro-active, dude…!!!
    Step the FLUCK up, and stop that chin music…

  • Then why is his fortune tied up in a charitable foundation? He needs to move all of his assets back to his personal accounts so that when he dies, the feds and state get a nice whack at his fortune. Warren, stick to investing, you are great at divining value and managing money, so leave the rest of the stuff for other people. My BRK shares will appreciate it.

  • And, of course, the other other narrative is that 15% is a “bargain” tax rate.   He attempts to make the point that the super-rich don’t do much work to earn their money.  Well here’s a clue for Mr. Buffet – the government doesn’t work at all for the 15% it takes.

    Buffet is full of it on most of his points but on this rebuff, I don’t see it.  They don’t work for the part they take from me either.  So I’m not understanding how that makes a difference in allowing to let them keep a low rate.  Lower than what i pay even not counting SS and Medicare. 

    I usually not a big fan of eat the rich, but I don’t see why I shouldn’t be a little miffed George Soros & co. funds a party that wants to tax me to death, but makes a loophole for himself. 

  • Well, according to Stephan Moore, Warren is full of it.
    http://online.wsj.com/article/SB10001424053111903999904576466541882356616.html
    “IRS data for 2008, for example, show that households in the top 10% of earners (above about $114,000) paid 19% of their income to the feds. Those in the top 1% (above $380,000) paid 23.3%. The top 0.1% of earners, with incomes of $2 million or more, end up paying a slightly lower tax of 22.7%, because they get more of their income from investments (more about this below).

    So what about the rest of us? According to IRS data, a median-income household ($35,000) in 2008 paid about 4% of its income in federal income tax.”

  • What I primarily took from Buffet’s piece is that there is no good reason for the cap gains tax rate to be lower than the earned income rate.  And I agree.  There is no good reason for the government to be favoring or disfavoring any economic activity with tax rates/deductions/credits.  The government has no idea what is worth favoring or disfavoring and has routinely throughout history made bad calls.  To the extent we need taxes to pay for essential services, those taxes should be assessed simply and evenly across the population above some reasonable income level.  A flat tax, same rate for everyone.

    • I don’t necessarily disagree, but the distinction drawn between them is largely in how ‘trapped’ capital vs labor is.  It is very easy for capital to relocate based on tax treatment, and much harder for labor.  In essence the origin of the different treatment comes from a difference in their ability to flee abusive taxes.  Equalize the capital gains tax to the personal income rates, and no one in the their right mind would invest in capital goods in the US…disaster.  Equalize the income rates at the capital gains rate, and there would be an economic boom.  That won’t happen due to the inability for the political class to get enough graft to satiate itself.  As if it could ever be satiated.   

  • Buffett also campaigns heavily for increased estate taxes, but he made his initial fortune buying up companies that were being ripped apart  by taxes after the death of the founder/owner.

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